President Joe Biden announced he would cancel up to $10,000 in student loan debt for borrowers making less than $125,000 a year and up to $20,000 for borrowers who received Pell Grants. The pause on student loan payments will be extended for the final time until Dec. 31.
“An entire generation is now saddled with unsustainable debt in exchange for an attempt at least at a college degree,” Biden said in a press conference Wednesday afternoon. “The burden is so heavy that even if you graduate, you may not have access to middle-class life that the college degree once provided.”
In the United States, 45 million people owe more than $1.6 trillion in federal loans taken out during college, according to data from Federal Student Aid. Nearly 8 million borrowers will immediately receive relief following the announcement based on data already submitted to the Department of Education.
Seventeen percent of UR undergraduates received Pell Grants last year, according to the Office of Financial Aid’s website. Those grants are awarded to undergraduates who demonstrate “exceptional financial need.”
Casey Schmidt, ‘15, graduated with about $35,000 in student loans, she said. This relief would help her be able to plan for the future where she and her fiancé are hoping to start a family, she said.
“I would love for us to get to a place where no one seeking higher education comes away with student debt,” Schmidt said.
Current students with loans are eligible for debt relief, according to the administration, and borrowers who are dependent students will be eligible based on their parents’ income.
Those with undergraduate loans will also have their repayment capped at 5% of their monthly income to keep future payments more manageable, Biden said.
“In keeping with my campaign promise, my administration is announcing a plan to give working and middle-class families breathing room as they prepare to resume federal student loan payments in January 2023,” Biden wrote in a Tweet on Wednesday.
Following the decision, Senator Tim Kaine said in a statement that he was glad to see Biden provide targeted student loan forgiveness.
“This will make a big difference for so many Virginians and Americans,” he said. “I’m going to keep working to ease the burden of student loan debt and make post-secondary education more affordable.”
Will Walker, ‘21, said he came from a middle-income family and graduated with about $30,000 in debt. Having $10,000 worth of debt canceled as a current graduate student was great, he said.
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“That opens up future opportunities for my future studies and opens up other federal loan opportunities that I can get at a later time if I realize that I need those,” Walker said.
For Cory Schutter, ‘19, these decisions would help others recognize the significance of the student loan debt crisis, he said.
“I'd hope that there's an advancement in education rights and that education can be more affordable like it was in past generations,” he said.
For future administrations, that may mean thinking about overhauling the student loan system and finding a more sustainable mechanism of controlling the cost of higher education, Walker said.
“We have to move beyond thinking of education as a private good and really start asking questions about what it means for education to be a public good and creating long-term solutions for funding,” he said.
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